Wealth driving 'No' vote on slots

Laura SmithermanSun reporter

Stewart Bainum Jr., who fought the Maryland lottery as a state lawmaker, left politics more than two decades ago. But the multimillionaire and hotel magnate is still playing a role in the debate over gambling in Maryland - he recently cut a $10,000 check to an organization that's working to sway voters against slot machines in the November referendum.

The group, which also includes prominent developers and the widow of an industrialist, is an eclectic one.

Each has his or her own reason for opposing slots, whether a moral or religious qualm or an intellectual objection to funding government through an industry accused of preying on the poor. They do have one thing in common: the financial wherewithal to get their viewpoints heard.

"I have always felt that state-sanctioned gaming is a form of regressive taxation, often against those who can least afford it," Bainum said. "The joke in Annapolis was that we would have to increase welfare payments so that lottery revenues would grow."

The money behind the slots debate will become a critical factor in the coming months as the rhetoric is likely to heat up and hit the television airwaves. Tens of millions of dollars have been spent on similar ballot measures in other states in recent years, with the pro-gambling side often garnering the largest donations from casino and gambling companies and outspending opponents by wide margins.

In Maryland, the slots campaign has some high-profile backers. Gov. Martin O'Malley, a Democrat, supports the referendum. Penn National Gaming Inc., which owns Charles Town Races and Slots in West Virginia and other gambling venues in the United States and Canada, recently promised financial backing. And the group leading the pro-slots effort can count on money and manpower from labor unions and the state Chamber of Commerce, which have endorsed it.

Opponents are counting on people like Nina Rodale Houghton, president of the Wye Institute - part of a liberal think tank called the Aspen Institute - and widow of Arthur A. Houghton Jr., whose great-grandfather founded what became Corning Inc.

Other donors include Sterling C. Crockett, a trustee for the Maryland Democratic Party who built a construction company from his spare bedroom; Bryant F. Foulger, a Rockville developer; and Otis Warren, a prominent developer based in Baltimore.

Neither side of the slots debate, though, is disclosing how much it has raised. Under Maryland law, donors do not have to be reported to the State Board of Elections until Oct. 10.

The General Assembly approved a law this year aimed at making the referendum battle more transparent by requiring any person, company, union or nonprofit that has spent more than $10,000 in support of or opposition to the referendum to register within a week of making those expenditures. But donations to ballot committees, which are expected to direct much of the campaigns, will not trigger the requirement.

According to the National Institute of Money in State Politics, the 2006 election cycle saw ballot measures in five states concerning gambling issues: Ohio, South Dakota, Arkansas, Nebraska and Rhode Island. Pro-gambling committees in those states raised nearly $47 million, compared with $7 million by the opposing committees. Gambling-related enterprises with a direct stake in the measures provided almost 90 percent of the contributions; in Rhode Island, casino companies engaged in a turf war over a proposed constitutional amendment that would have allowed a Native American tribe to open a resort casino.

But only the Arkansas measure passed, establishing charitable games such as bingo and raffles in the state. Other measures seeking an expansion of gambling failed despite the fact that opponents were heavily outspent.

In Maryland, voters will decide on a constitutional amendment that would allow 15,000 slot machines at five locations: one each in Baltimore City and Allegany, Anne Arundel, Cecil and Worcester counties.

Frederick W. Puddester, chairman of For Maryland, For Our Future, the pro-slots ballot committee, declined to disclose any donors. He said that discussions about who's funding the campaigns - along with warnings from opponents that monied gambling interests and out-of-state donors will muddy the debate - would divert attention from the important issues. Proponents say that without slots revenue, the state would have to resort to budget cuts or tax increases.

"There is all this talk about our budget and money, but the main point here is the state budget," said Puddester, a former state budget secretary. "If this thing fails, we're down $600 million. That's the budget that really matters."

The anti-slots crowd emphasizes the grass-roots nature of its campaign and that many donations come from residents and small businesses in increments of $25, $50 and $100. The profile of the big donor is harder to pin down.

"It's no surprise who's funding the pro side," said Aaron Meisner of Stop Slots Maryland. "With the anti side, it's hard to put your finger on what motivates the typical person to write a large check."

Bainum served two terms in the General Assembly until 1986, when he ran for Congress and lost. He founded Choice Hotels, a lodging concern he spun off from nursing home operator Manor Care Inc. in 1996. He's also a member of Democratic presidential candidate Barack Obama's national finance committee.

He said he consistently voted to slash the marketing budget for the state lottery when he served in the state legislature. Bainum is a Seventh-day Adventist, a member of a denomination that opposes gambling, but he said that his opposition to the referendum stems from his belief that it's the wrong way to fund government.

Houghton's Aspen Institute is a nonprofit center for education and conferences on world issues; she also has served on the Board of Regents at the University System of Maryland. While she often stays behind the scenes, her high-powered connections came to the fore when the Elian Gonzalez family was secreted at her estate after the 2000 raid on their Miami home.

She has also been a major backer of Stop Slots Maryland, a group that that has lobbied against slots proposals for years, and she expects to give more money as the referendum nears. Her politics have always been liberal - she said she would favor communism if it worked in practice. But slots, she said, will scar neighborhoods with crime and addiction.

"It's one thing to go to Las Vegas, but you don't want that at home," she said.

Some donors are new to the fight.

Crockett, who calls himself an "up-from-the-bootstraps kind of guy" who grew up with meager means, has done well financially and serves as chairman and chief executive officer of Sterling Construction Services Inc., which has offices in Rockville and Baltimore. He said he recently made a donation to the anti-slots campaign but declined to say how much. Slots present a "false hope," he said.

"I see this as a way I can possibly aid in keeping this out of the state of Maryland," he said.